AEGON N.V. (NYSE:AEG) Q1 2016 Earnings Conference Call - Preliminary Transcript

May 12, 2016 • 08:00 am ET


AEGON N.V. (NYSE:AEG) Q1 2016 Earnings Conference Call - Preliminary Transcript


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Good day and welcome to the Aegon Q1 Results 2016 Conference Call. Today's conference is being recorded.

And at this time, I would like to turn the conference over to Mr. Willem van den Berg. Please go ahead, sir.

Willem van den Berg

Thank you. Good morning everyone and thank you for joining this conference call on Aegon's first quarter 2016 results. We will keep today's presentation short, leaving enough time to address your questions. We would appreciate it if you take a moment to review our disclaimer on forward--looking statements, which is at the back of our presentation. First, our CEO, Alex Wynaendts, will first provide an overview of our performance and will be joined by our CFO, Darryl Button, to answer your questions.Alex, please go ahead.

Alex Wynaendts

Good morning, everyone. We really appreciate you taking the time to joining us on such a busy day with many companies reporting at the same time. So let me being by providing you with a brief overview of our first quarter results before then going to more detail.

Our results were impacted by the channeling financial market conditions we saw in the first quarter. Underlying earnings were impacted by lower average equity markets, while net income was impacted by fair value losses as a result of underperformance of alternative investments and hedges. While our capital position remains solid and well within our target, our Solvency II ratio reflects the return of capital to shareholders and address adverse market impacts. Excluding market impacts and onetime items, capita generation amounted to approximately EUR300 million.

Our strong sales story continues with sales increasing by 36% to EUR3.6 billion. This growth was mainly driven by higher deposits of EUR30 billion. And the strategic steps in UK that we announced recently will drive further growth of our fee base business.

On Slide Three, you can see that underlying earnings increased this quarter by EUR30 million compared with last year. So let me run you through the main moving parts.

In the Americas, earnings declined slightly as an improvement in claims experience was more than offset by lower earnings of fee businesses. This was partly as a result of lower equity markets and this is something I'll come back to the next slides.

In Europe, earnings increased by 20% to EUR169 million. This increase was mainly driven by lower differed acquisition cost in UK as a result of the write--down of deck related to upgrading customers to retirement platform in the fourth quarter of 2015.

Asset management earnings were again strong at EUR45 million and benefited from continued -- and performance fees. This quarter as you all have seen, we have adjusted our financial reporting to reflect both the growth imports of asset management and our increased focus on Asia.

Finally, holding decline to EUR36 million due to lower funding cost following the redemption of senior debt at the end of last year.

Let me now explain in greater detail on Slide Four, how the volatility in equity markets impacted our earnings in